diff --git a/doc/source/whatsnew/v3.0.0.rst b/doc/source/whatsnew/v3.0.0.rst
index 8d3ac0e396430..2f9031bcea070 100644
--- a/doc/source/whatsnew/v3.0.0.rst
+++ b/doc/source/whatsnew/v3.0.0.rst
@@ -748,6 +748,7 @@ Indexing
 - Bug in :meth:`DataFrame.loc` with inconsistent behavior of loc-set with 2 given indexes to Series (:issue:`59933`)
 - Bug in :meth:`Index.get_indexer` and similar methods when ``NaN`` is located at or after position 128 (:issue:`58924`)
 - Bug in :meth:`MultiIndex.insert` when a new value inserted to a datetime-like level gets cast to ``NaT`` and fails indexing (:issue:`60388`)
+- Bug in :meth:`Series.__setitem__` when assigning boolean series with boolean indexer will raise ``LossySetitemError`` (:issue:`57338`)
 - Bug in printing :attr:`Index.names` and :attr:`MultiIndex.levels` would not escape single quotes (:issue:`60190`)
 - Bug in reindexing of :class:`DataFrame` with :class:`PeriodDtype` columns in case of consolidated block (:issue:`60980`, :issue:`60273`)
 
diff --git a/pandas/core/dtypes/cast.py b/pandas/core/dtypes/cast.py
index dae04ba6244d4..47e52f36ad121 100644
--- a/pandas/core/dtypes/cast.py
+++ b/pandas/core/dtypes/cast.py
@@ -1926,6 +1926,10 @@ def np_can_hold_element(dtype: np.dtype, element: Any) -> Any:
                         # i.e. there are pd.NA elements
                         raise LossySetitemError
                 return element
+            # GH 57338 check boolean array set as object type
+            if tipo.kind == "O" and isinstance(element, np.ndarray):
+                if lib.is_bool_array(element):
+                    return element.astype("bool")
             raise LossySetitemError
         if lib.is_bool(element):
             return element
diff --git a/pandas/tests/dtypes/cast/test_can_hold_element.py b/pandas/tests/dtypes/cast/test_can_hold_element.py
index 3b7d76ead119a..5ef021753b843 100644
--- a/pandas/tests/dtypes/cast/test_can_hold_element.py
+++ b/pandas/tests/dtypes/cast/test_can_hold_element.py
@@ -77,3 +77,22 @@ def test_can_hold_element_int8_int():
     assert not can_hold_element(arr, np.uint32(element))
     assert not can_hold_element(arr, np.int64(element))
     assert not can_hold_element(arr, np.uint64(element))
+
+
+def test_can_hold_element_bool():
+    arr = np.array([], dtype=bool)
+
+    element = True
+    assert can_hold_element(arr, element)
+    assert can_hold_element(arr, np.array([element]))
+    assert can_hold_element(arr, np.array([element], dtype=object))
+
+    element = 1
+    assert not can_hold_element(arr, element)
+    assert not can_hold_element(arr, np.array([element]))
+    assert not can_hold_element(arr, np.array([element], dtype=object))
+
+    element = np.nan
+    assert not can_hold_element(arr, element)
+    assert not can_hold_element(arr, np.array([element]))
+    assert not can_hold_element(arr, np.array([element], dtype=object))
diff --git a/pandas/tests/series/indexing/test_setitem.py b/pandas/tests/series/indexing/test_setitem.py
index 964f0b90b3c41..ae3b0d10214e3 100644
--- a/pandas/tests/series/indexing/test_setitem.py
+++ b/pandas/tests/series/indexing/test_setitem.py
@@ -1838,3 +1838,13 @@ def test_setitem_empty_mask_dont_upcast_dt64():
     ser.mask(mask, "foo", inplace=True)
     assert ser.dtype == dti.dtype  # no-op -> dont upcast
     tm.assert_series_equal(ser, orig)
+
+
+def test_setitem_bool_dtype_with_boolean_indexer():
+    # GH 57338
+    s1 = Series([True, True, True], dtype=bool)
+    s2 = Series([False, False, False], dtype=bool)
+    condition = [False, True, False]
+    s1[condition] = s2[condition]
+    expected = Series([True, False, True], dtype=bool)
+    tm.assert_series_equal(s1, expected)